Agenda/Topics to be Covered Welcome Course overview and procedures Lecture: Five factors influencing choice of HR

policies and processes; the strategic role of HRM Reading: Producing sustainable competitive

advantage through the effective management of people.

Mini case: The northeast health center

Tracy Zhou MW Rm 605 2241-5666 tzhou@business.hku.hk Office hours: Tue 11:30-12:30,

Thur 11-12, or by appointments

Course procedures

Prerequisites How class time will be used Deliverables

- 20% Group Case Presentation & Analysis

- 30% Group Project

- 30% End-of-Term Exam

- 20% Class Participation

http://www.fbe.hku.hk/Programme/Undergraduate/course_details.cfm?school=SoB&coursecode=BUSI0029A&yearheld=2010-2011

Class Participation Assignment

Due Date: Tue. Jan 18th, 2011 4 x 6 index card with information Attach a picture

Dr. Xiaohua Zhou (Tracy)22415666tzhou6@business.hku.hk

Ph.D. in ManagementFinancial Corporation My expectation for the course is …..

Classroom Courtesy

Managers need to establish policies and enforce them

Mobile Phone Policy Foods and Drinks Please try to sit with your group members. Participation and learning atmosphere

Central themes

Emphasis on general manager, not HR specialist

HR as source of strategic advantage “The whole is greater than the sum of the

parts” People are an investment HR and the bottom line

Does the HR system fit?

Do the HR policies fit in the broader context of the organization (Alignment)?

To what extent are the individual pieces of the HR system internally complementary or consistent?

The five factors

External environment: social, political, legal, and economic

Workforce: demographics, skill Organization’s culture Organization’s strategy Technology of production and organization of

work

Legal environment

Pay Hiring Employee voice Firing International differences: US vs. Europe vs.

rest of world

Economic environment

Primary source of production has shifted from physical to intellectual capital

Economic paradigm characterized by speed, innovation, short cycle times, quality, and customer satisfaction

Globalization and Increased competition Workers more educated Rising pay differences by skill Narrowing gender gap

More women Education level Socially homogeneous or heterogeneous Diversity

Workforce

Culture

Creativity vs. conformity Flat vs. hierarchy Co-operation vs. competition Family vs. contract labor

Strategy

Source of competitive advantage

- Quality and service

- Cost

- Innovation Ability to maintain advantage Long-term objective

Key technological factors

Privacy/proximity Training Effort-results correlation Interdependence of workers Task ambiguity and discretion

Changes in jobs

Greater use of computers More work in engineering, R&D settings More teams, TQM Smart skills for what used to be manual jobs

An organization’s HR practices can be beautifully crafted to fit the broader context of one time and place, but fit less well as conditions shift.

Key lessons

The five factors are not fixed and unalterable, an organization has some control over them.

They are neither infinitely adaptable Fit them to HR practices and HR practices to

them to the greatest extent feasible.

The field of HRM

Recruiting Selection Promotion Training Job design Performance evaluation

It consists of various practices used to manage people in organization, and these practices commonly have been grouped into the subdisciplines such as:

HR’s Strategic Challenges

Support corporate productivity and improve performance.

HR must be more involved in designing—not just executing—the company’s strategic plan How to match its internal strengths and

weaknesses with external opportunities and threats in order to maintain a competitive advantage.

HR and Competitive Advantage

Competitive advantage Any factors that allow an organization to

differentiate its product or service from those of its competitors to increase market share.

Superior human resources are an important source of competitive advantage

Strategic Management Process

Strategic management tasks

Step 1: Define the Business and Its Mission

Step 2: Perform External and Internal Audits

Step 3: Translate the Mission into Strategic Goals

Step 4: Formulate a Strategy to Achieve theStrategic Goals

Step 5: Implement the Strategy

Step 6: Evaluate Performance

Overview of Strategic Management

Figure 3–1

Strategies in Brief

Figure 3–3

Company Strategic Principle

Dell Be direct

eBay Focus on trading communities

General Electric Be number one or number two in every

industry in which we compete, or get out

Southwest Airlines Meet customers’ short-haul travel needs

at fares competitive with the cost of automobile travel

Vanguard Unmatchable value for the investor-owner

Wal-Mart Low prices, every day Source: Arit Gadiesh and James Gilbert, “Frontline Action,” Harvard Business Review, May 2001, p. 74.

Types of Strategic Planning

Corporate-level strategy Diversification strategy-- that the firm expands

by adding new product lines.

Vertical integration strategy-- the firm expands by, producing its own raw materials, or selling its products direct.

Consolidation strategy-- reduces the company’s size

Geographic expansion strategy-- takes the company abroad.

Types of Strategic Planning

Business-level/competitive strategy Cost leadership: become the low-cost leader in

an industry.

Differentiation: seeks to be unique in its industry along dimensions valued by buyers.

Focus: seeks to carve out a market niche, and compete by providing a product or service customers can get in no other way.

Types of Strategic Planning (cont’d) Functional strategies

Identify the basic courses of action that each department will pursue in order to help the business attain its competitive goals.

Achieving Strategic Fit

Michael Porter Emphasizes the “fit” point of view that all of the

firm’s activities must be tailored to or fit its strategy, by ensuring that the firm’s functional strategies support its corporate and competitive strategies.

Strategic Human Resource Management

Strategic Human Resource Management The pattern of planned human resource

deployment and activities intended to enable an organization to achieve its goals.

-- Vertically, the linking of HRM with strategic goals and objectives

-- Horizontally, the coordination or congruence among the various human resource management practices through a pattern of planned action.

Linking Corporate and HR Strategies

Figure 3–6 Source: © 2003, Gary Dessler, Ph.D.

Traditional HR Versus Strategic HR

Basic Model of How to AlignHR Strategy and Actionswith Business Strategy

Figure 3–9

Translating Strategy into HR Policy and Practice

Barriers to Strategic HR

Short-term mentality / focus on current performance

Inability of HR to think strategically Failure to understand general manager’s role

as an HR manager Difficulty in quantifying many HR outcomes Perception of human assets as high-risk

investments Resistance to change that might arise

Reading: Effective HRM Practices

Mark the sentences or sections that you think are important or impress you most. Please explain why.

List these 13 HRM practices in terms of their importance to you from the most critical one to the least critical one.

Write down any extra practices that you think can be added to the list.

Write your commentary on this article. (If you disagree with the author on certain points please discuss.)